Filing compliance agreement

PURPOSE OF BULLETIN

To advise staff that Franchise Tax Board offers taxpayers who do not qualify under the Voluntary Disclosure Program (VDP), an opportunity to enter into a filing compliance agreement for all tax years with a filing requirement.

BACKGROUND

The Voluntary Disclosure Program allows taxpayers who have a filing requirement to enter into an agreement to file returns for the previous six years. The applicants must pay the self-assessed tax, interest, and for amnesty eligible years, the amnesty penalty.

For taxpayers who do not qualify for VDP, we are offering an opportunity for taxpayers to come forward and enter into a filing compliance agreement.

WHAT SHOULD THE TAXPAYER DO?

Eligible taxpayers should send a letter with the following information to the address listed below:

Explain why they failed to file and pay taxes.

Give detailed explanations for a waiver of penalty based on reasonable cause.

Tax years involved.

If the taxpayer’s request to enter into a filing compliance agreement is accepted, they must file all returns, pay the self assessed tax and interest for each year covered under the agreement, and for amnesty eligible years, the amnesty penalty. They must also pay applicable estimated tax penalties.

We will not assess the late filing and late payment penalties where there is reasonable cause. The amnesty penalty or the estimated tax penalty cannot be waived due to reasonable cause.